19 Structure of arrangements - Agent as client Client agreements It is crucial that each of the parties (DIM, adviser firm and investor) understands how the arrangements operate and their respective responsibilities. The basis on which each of the parties is acting must be set out clearly. Generally, this will be set out in the contractual documentation, for example in a Schedule of Services. Agreement between DIM and adviser firm (Intermediary agreement) The agreement between the DIM and adviser firm should confirm clearly the capacity in which each party is acting. It should also cover the following key areas: • Roles and responsibilities Who is providing the advice (adviser) and who is undertaking the investment management activity (DIM). • Suitability Who is responsible for ensuring the advice to invest in the discretionary management solution is suitable (adviser) and who is responsible for ensuring the suitability of decisions to trade for the investment mandate set (DIM). • Vulnerable clients Responsibility for assessing any characteristics of vulnerability. In the agent as client scenario, this obligation is likely to fall on the adviser firm as the DIM may not know the identity of the underlying investor. In setting the target market for its discretionary management service the DIM will set out any groups of investor for whom the proposition may not be appropriate. • Client classification Confirmation of how the DIM is classifying the adviser firm - professional or retail client. • Reporting Who is responsible for ensuring investors are provided with periodic reports and other required information. The agreement will need to reference how the information is provided, for example via a platform. • Communications from DIMs How communications from DIMs will be passed on to investors – such as factsheets / market commentary etc. • Value assessments How and when DIMS will produce value assessments and provide them for advisers to take into account in determining the value of their own services. Chapter two - Structure of arrangements - Agent as client
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